Correlation Between PT Harapan and PAM Mineral
Can any of the company-specific risk be diversified away by investing in both PT Harapan and PAM Mineral at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT Harapan and PAM Mineral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Harapan Duta and PAM Mineral Tbk, you can compare the effects of market volatilities on PT Harapan and PAM Mineral and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT Harapan with a short position of PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Harapan and PAM Mineral.
Diversification Opportunities for PT Harapan and PAM Mineral
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HOPE and PAM is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Harapan Duta and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk and PT Harapan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT Harapan Duta are associated (or correlated) with PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of PT Harapan i.e., PT Harapan and PAM Mineral go up and down completely randomly.
Pair Corralation between PT Harapan and PAM Mineral
Assuming the 90 days trading horizon PT Harapan Duta is expected to under-perform the PAM Mineral. In addition to that, PT Harapan is 1.13 times more volatile than PAM Mineral Tbk. It trades about -0.01 of its total potential returns per unit of risk. PAM Mineral Tbk is currently generating about 0.09 per unit of volatility. If you would invest 16,386 in PAM Mineral Tbk on September 1, 2024 and sell it today you would earn a total of 13,214 from holding PAM Mineral Tbk or generate 80.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.44% |
| Values | Daily Returns |
PT Harapan Duta vs. PAM Mineral Tbk
Performance |
| Timeline |
| PT Harapan Duta |
| PAM Mineral Tbk |
PT Harapan and PAM Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Harapan and PAM Mineral
The main advantage of trading using opposite PT Harapan and PAM Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Harapan position performs unexpectedly, PAM Mineral can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PAM Mineral will offset losses from the drop in PAM Mineral's long position.| PT Harapan vs. Ladangbaja Murni PT | PT Harapan vs. Berkah Beton Sadaya | PT Harapan vs. Cahayaputra Asa Keramik | PT Harapan vs. Diagnos Laboratorium Utama |
| PAM Mineral vs. Archi Indonesia Tbk | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Bank Panin Syariah | PAM Mineral vs. Central Omega Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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